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During January 2018, the following transactions occur: January 1 Purchase equipment for $21,400. The company estimates a residual value of $3,400 and a five-year service
During January 2018, the following transactions occur:
January 1 | Purchase equipment for $21,400. The company estimates a residual value of $3,400 and a five-year service life. |
January 4 | Pay cash on accounts payable, $11,400. |
January 8 | Purchase additional inventory on account, $101,900. |
January 15 | Receive cash on accounts receivable, $23,900 |
January 19 | Pay cash for salaries, $31,700. |
January 28 | Pay cash for January utilities, $18,400. |
January 30 | Firework sales for January total $239,000. All of these sales are on account. The cost of the units sold is $124,500. |
The following information is available on January 31, 2018.
- Depreciation on the equipment for the month of January is calculated using the straight-line method.
- The company estimates future uncollectible accounts. The company determines $4,900 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be uncollectible. The note receivable of $34,800 is considered fully collectible and therefore is not included in the estimate of uncollectible accounts. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
- Accrued interest revenue on notes receivable for January.
- Unpaid salaries at the end of January are $34,500.
- Accrued income taxes at the end of January are $10,900
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